Elston unveils its Commonwealth index of publicly-listed equities

Elston Consulting has unveiled its Elston Commonwealth Index family: a suite of equity indices to evaluate the performance of publicly listed equities of Commonwealth countries.

The firm writes that since its modern founding in 1949, the Commonwealth is one of the world’s largest and most enduring associations of nations. 

“Its 56 members share a common language of business, common-law legal traditions and a commitment to democratic principles and the rule of law. The Commonwealth Enterprise and Investment Council calls the result the “Commonwealth Advantage”: member states trade more with one another, and at lower cost, than with comparable partners outside this family of nations.

“Surprisingly there has never been an equity index that groups these companies together and measures how they perform as a whole.

“That is a glaring gap. Indices built around political and economic groupings are nothing new. Investors can already track the Eurozone, the G7, the Gulf Cooperation Council, ASEAN and the BRIC economies. It is an anomaly that one of the oldest groupings of all has had no benchmark of its own. The new Elston Commonwealth Index family sets out to close that gap for the first time.”

What’s inside the indices

This new flagship index concept brings together the largest listed companies domiciled across the Commonwealth.  The index is led by companies in Canada, the United Kingdom, India, Australia, Singapore and South Africa.  This breaks downs the increasingly dated boundary between Developed and Emerging Markets, the firm says.

The Elston Commonwealth Index family comprises four indices:

Elston Commonwealth 100 (C100): the 100 largest Commonwealth companies, weighted by market capitalisation.

Elston Commonwealth 100 Equal Weight (C100EW): the same 100 companies, each held in equal measure.

Elston Commonwealth 500 (C500): a broader universe of the 500 largest Commonwealth companies, weighted by market capitalisation.

Elston Commonwealth 500 Equal Weight (C500EW): the same 500 companies, equally weighted.

Of the four, the Elston Commonwealth 100 Equal Weight Index stands out as the preferred basis for any future fund launch. In historical analysis it delivered the strongest risk-adjusted returns of the family,

Constructed as research indices as a first step for evaluation purposes, Elston is seeking partnerships with fund providers to launch index-tracking funds to make this investment approach investable.

Elston Consulting is an investment consulting firm headquartered in London. The Commonwealth index concept was developed by its Founder and Head of Research, Henry Cobbe CFA, and Investment Director, Hoshang Daroga CFA, both of whom have strong links to Commonwealth countries.

Hoshang Daroga says: “This has been a gap that we’ve been meaning to close for a while. It seemed ironic that whilst common legal traditions, common business language, and shared heritage groups many of these businesses together, there was no formal grouping in the world of equity indices.”

Henry Cobbe says: “The Commonwealth today is a powerful and enduring networking opportunity –   not only for governments, but also for publicly listed businesses. This is very much not about looking back. It’s about looking forward and creating business links, and dialogue within a unique opportunity set.”